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How to Apply for a Semi-Truck Loan

 

Now is a great time to enter the commercial trucking industry. With the demand for drivers higher than ever, you can expect job security, great pay, and plenty of stories to tell from your time on the open road. While trucking is an excellent and prevalent career choice, being the most common career in 29 states across the U.S., it often requires upfront investment to get started. Just like owning a business, truckers have to pay their overhead. This can include purchasing the truck, replacing parts, and taking care of costly repairs.

If finances are holding you back from your new career as a trucker, or if the truck you currently own is in need of updates, financing may be the solution for you. Luckily, companies like Mission Financial are here to help you get the financing you need. Here is what you need to know about financing through Mission Financial.

Commercial Financing Options

Mission Financial offers financing for dealerships as well as owner operators. While we provide loans for new and used trucks, we also offer financing options for other trucking necessities including:

  • Tire Replacements
  • Operating Capital
  • Lease Purchase Buy-Outs
  • Loan Refinancing
  • Truck Repairs
  • Licensing and Permits

Commercial Vehicle and Business Auto Loans  

When applying for commercial vehicle financing, it is important to understand that a business auto loan is much different than an auto loan one would normally get for personal use. Due to the stricter rules surrounding commercial loans, it is more important to make payments on time. The interest rates for business auto loans can also be much higher than other loans. While a personal loan typically has an interest rate of 5 percent or less, interest rates on commercial trucking loans can range between 5-30 percent. These differences will be important to understand and recognize when applying for financing.

How to Apply for a Semi-Truck Loan

Before applying for financing, there are a few things you will need to have ready. Follow these steps to make sure your application process is as smooth as possible.

 1. Determine Eligibility

Before applying, it is important to check to see if you qualify. Qualifying factors include your credit score, how long you have had your CDL, your down payment, and the age of the truck. If you are a first-time owner operator or have a low credit score, you can still qualify for a loan through Mission Financial. In fact, our company specializes in low credit loans. While you may still choose to apply for a loan, it is important to understand your financial state before taking this step.  

2. Gather Needed Info

Even before shopping around for a truck, you will want to get all of your paperwork in order for your financing. This is an important step because when you find the perfect truck, you will need to act fast. If another buyer comes in while you are trying to gather information, you may miss out on the vehicle. Before applying for financing, have the following information on hand:

  • Cell phone contact
  • Current Commercial Driver’s License (CDL)
  • Proof of insurance with at least a $1,000 deductible
  • 6 references or 10 references without active phone bill
  • Bank statements and/or tax returns

Depending on your financial situation or employer, you may also need the following information

  • Co-signer Statement
  • LLC Agreement & Operating Agreement
  • Articles of Incorporation & Corporate Resolution

3. Find Your Truck

Once you have determined eligibility and gathered the necessary information, it is time to find your truck. It will be important to find a truck that meets the hauling requirements of your business.

After you have found the right vehicle, be sure to negotiate the price and get a written quote on the purchase of the truck. Along with the price, the written quote will need to contain the following information:

  • Title and Vehicle Registration
  • Pictures of the truck you wish to finance
  • Original signed credit application
  • Guarantee of Title

4. Get the Right Insurance

It is possible to get pre-approved without insurance. However, providing proof of insurance is highly recommended when applying for a commercial loan. Your insurance needs will be based on the type of business, but most truckers need the following types of insurance:

  • Primary liability coverage
  • Cargo coverage
  • Bobtail coverage for non-trucking use
  • Physical damage coverage

5. Submit Your Documents to Mission Financial

Once you have completed the above steps, it is time to apply for financing through Mission Financial. Having everything you need ready in advance will make the application process go smoothly for all involved parties.

Applying for commercial truck financing can seem like a daunting task. However, with companies like Mission Financial that specialize in semi-truck and business auto loans, we are ready to work with you to get you on the road in no time.

What to Consider When Financing a Truck With Bad Credit

 

Bad credit can leave people feeling stuck. Without a good credit score, buying a house, a car, or paying for school can feel difficult or even impossible. Additionally, making a big purchase with bad credit can mean you pay more in the long run. In fact, when applying for an auto loan, those with bad credit can end up paying 311 percent more in interest than someone with “very good” credit. And starting a business or buying a freight truck can feel just as intimidating and impossible when your credit is less than perfect. However, this does not have to be the case.

Having bad credit doesn’t mean you cannot jumpstart your career as a truck driver or finance a new truck. With the trucker shortage causing the demand for qualified and capable truck drivers to skyrocket, there are large incentives to get truckers out on the road with or without excellent credit. Here is what you need to know about financing a semi-truck with bad credit.

Use Your Assets as Collateral

Those with good credit can often use their positive history as a way to get a loan. For those without good credit, finding another way to secure the loan may be necessary. One great way to do so is to put up some collateral.

Collateral is anything you own that can be pledged to the loan provider until it is paid in full. These are often an option for people with bad credit, because if the loan is not repaid, the lender knows they can seize the collateral and use the money from it to repay what is owed to them. There are two forms of collateral to keep in mind: Hard and paper collateral. Hard collateral consists of homes, businesses, cars, and anything else that would have to be liquidated to cash in the event that it was seized by the lender.

Paper collateral includes stocks, bonds, and other items that would be easier to convert to cash. It is important to understand the difference between these two types of collateral before applying for a loan. Paper loans are often much easier to liquidate, making them more appealing to a potential lender. If offering some sort of collateral seems like the best course of action for you, consider making a list of your assets that could be used as collateral.

Use Your Commercial Truck as Collateral

Sometimes, you can even use your semi-truck as collateral when applying for a truck loan. You will still have to make monthly payments on the truck, but the financing company will know they can seize the truck and sell it if you are unable to pay. When securing a loan for a commercial truck, it is also important to remember that you will be receiving a business loan. Business loans are different than standard loans, and with that comes unique rules for both you and the loan provider. These rules make it easier for the lender to seize property if they are not receiving payments. This means that while it may be easier to secure a loan with bad credit, there will be faster and harsher consequences if you are unable to abide by the terms.

You May be Eligible for a Grant

Grants can be another great way to secure funding for your new semi-truck. Luckily, there are a variety of grants for truckers to apply for. Depending on your experience level in the field, you may be qualified for different grant options.

Mission Financial Specializes in Bad Credit Financing

Bad credit does not have to stop you from your career goals. When applying for a loan, it is especially helpful to work with a lender that specializes in low credit financing like Mission Financial. Mission Financial Services has been providing commercial auto loans and refinancing options for over 19 years. As a direct lender, we offer loans through dealers as well as direct lending in 48 states.

Mission Financial is proud to be a common-sense lender. This means we analyze more than just your credit score. We examine each applicant’s overall credit, instead of only the number on your credit report. If you are willing to put up collateral and have a history of on-time payments, you are likely to be approved for a loan with Mission Financial.

Cass Freight Index Report Remains Optimistic For 2019

 

With the start of the new year, the commercial trucking and freight industry faces many obstacles. The trucker deficit continues to increase, and the high tariffs against China are projected to have great implications on exports in many parts of the U.S. However, despite growing concerns and harsh year-over-year comparisons, the Cass Freight Index report for January 2019 remains promising. Here is what you need to know about the Cass Freight Index report’s outlook for trucking in 2019.

What is the Cass Freight Index Report?

The Cass Freight Index report is a monthly publication released by Cass Information Systems. Since 1995, this report has been a highly trusted source of insight into the trucking industry and how it correlates with the wider economy.

The Cass Freight Index is often referenced by news sources and industry professionals. This report is also considered by many logistics executives and analysts to be the “most accurate barometer of freight volumes and market conditions.”

January’s Cass Freight Report Insights

When examining December and January’s data, the untrained eye may see a negative report. From January 2018, this year’s January report is down 0.3 percent. Additionally, January is down 1.2 percent compared to December 2018. Annually, December was also down by 0.8 percent.

January and December were the first two months in the last two years to reap negative numbers. However, the author of the Cass Freight Report, Donald Broughton, states that this is not a cause for concern. Because December 2017 and January 2018 were all time highs for shipment growth, a slight decrease this year simply means that freight flows are stabilizing.

Shipments May Continue to Lower

The author of January’s report also states that shipments may continue to show negative results through the coming months. Broughton explains that this may be the case due to the following factors:

  • Increasingly difficult annual comparisons
  • Transportation infrastructure at or near full capacity
  • Low employment making it difficult to grow the active workforce

The Trucking Industry in 2019

Despite the negative numbers, Broughton ensures there is no need for alarm. In fact, the trucking industry is holding more promise in 2019 than previously expected. The report states that before January, many analysts and industry experts believed there was no way for 2019 to surpass the exponential growth seen in 2018. However, the outlook on 2019 has now changed. While many still don’t believe we will see comparative numbers to 2018 throughout the year, the report anticipates growth at an above-average pace will be seen.

Possible Storm Clouds

The report remains optimistic for 2019 growth. However, it also states that there are two “storm clouds” on the horizon that should not be ignored. When considering the freight industry in 2019, these two international issues should be considered:

Higher tariff threats with China

At the beginning of January, the U.S. had raised tariffs against China by 10 percent. Now, there is a threat of raising these tariffs to 25 percent in the coming months. China is the world’s second largest economy, and the increased tariffs could have real implications on the U.S.A.’s agriculture exports, along with other raw materials. If even higher tariffs are put in place, the freight industry could see a real decrease in volume.

The Decline of WTI Crude

In December, WTI Crude oil reached a low of $42.50 per barrel. This caused the oil to become less profitable, which in turn led to less incentive to drill for this oil. However, at the time of the report, WTI Crude was back up to $51 per barrel, which has led to some optimism on this front. However, there is still uncertainty about the future of crude fracking throughout 2019.

Growing Pains for the Trucking Industry in 2019

 

The U.S. is suffering a severe shortage of truck drivers. In fact, the industry is now facing a deficit of over 53,000 qualified truck drivers. Over the next decade, the shortage is projected to skyrocket to 898,000. Actions are being taken around every corner to combat this deficit. From recruiting more women to attempting to cater to the needs of millennials, freight companies and large businesses are looking for ways to get more qualified drivers behind the wheel.

However, if the shortage comes to an end, there will be other problems to face. From overcrowded truck stops to strict regulations on hours, there are some challenges the trucking industry needs to face now, so it can continue to grow. Here are a few of the issues the trucking industry must solve to expand smoothly in 2019.

Too Many Trucks on the Road

Gridlock traffic can make even short hauls take far longer than anticipated. Traffic means longer hours for truckers and more gas and labor expenses for freight owners. If that gap closes, that means there will be at least 53,000 more trucks on America’s highways. More trucks could potentially cause more traffic for everyday commuters as well as truckers. And with less truckers interested or willing to drive through the night, more are facing traffic and adding to the congestion. This will be a challenge the trucking industry will have to face if the gap is to close. Better routes, different hours, and altered expectations will have to be put into place to seamlessly add more trucks to the road.

Truck Parking Shortage

Finding a safe place to park your truck and take a rest is already an issue for truckers. Often, rest areas and truck stops are full to capacity, especially in the evening, leaving drivers to park on exit ramps. Some states allow this, but many places have laws against parking on ramps.

Legal or not, according to the president of Jet Express Trucking in Dayton and the former chairman of the American Trucking Associations, Kevin Burch, this is an accident waiting to happen. Especially when trucks park on off ramps from the highway, cars can come speeding around the corner and not see the truck in time. Burch believes that the government should be doing more to provide safe parking for long-haul truckers.

It is mandatory for truckers to take breaks after a certain number of hours, but when taking a rest is putting them at a higher risk than continuing to drive, something needs to change. This problem will only get worse as more truckers are introduced into the industry. More trucks on the road will mean even fewer safe areas to park.

As of now, freight owners are encouraging drivers to plan their driving hours, so they can find available places to park and rest when it is time. Where it is legal to park on the side of exit ramps, truckers are being encouraged to only park on ramps that enter the highway, as to avoid highway traffic.

Time Logging Issues

Finally, the trucking industry has introduced new logging technology that is causing some frustration. Originally, truckers would log their own hours by hand. Since the logging was all on pen and paper, truckers were often caught being dishonest about how many hours they had worked. In fact, log violations were the most frequent form of violation among truckers in 2017.

Due to the high volume of log violations, it became a federal rule in December 2017 that all large trucks be equipped with electronic logging devices. While many believe the electronic systems are a good idea, they do not allow for much flexibility for drivers. They only allow a driver to be on duty for a specific set of hours, require breaks after eight hours, and expect 10 hours of rest time for truckers with a berth.

Truckers would like to see more flexibility to give them the option to pull off the road in heavy traffic and make up the hours when there is less congestion. They would also like to cut the required rest time to eight hours and apply the other two to breaks throughout the shift.

Most rule makers in the trucking industry agree that the electronic logging systems need to stay. However, some are willing to consider modifying the strict rules. Having this issue sorted out in 2019 would allow for less pushback and more room for the industry to grow. It may inspire more people to become truckers, and it will also allow current truckers to work more efficiently and feel more in control of their days.

The transportation industry has plenty of room to grow and solving potential problems now will help make room for more truckers on the road.

How to Stay Safe in Harsh Winter Conditions

 

No matter how much experience a driver has, harsh winter conditions can present a range of challenges on the road. From slick road surfaces to limited visibility, commercial truck drivers have to be ready for anything. Winters in the Northeast and Midwest are especially brutal, and almost always result in blizzards and multiple feet of snow on the ground. Even though February is half-way over, the cold temperatures and icy roads will still be here for a while. Thankfully, there are many things drivers can do to stay safe even in the worst winter months. Here are some things every trucker can do to keep themselves and other drivers safe this winter.

Pack for the Winter  

Any trip in winter weather starts with preparation. Before ever starting your truck’s engine, make sure you have everything to stay warm and safe no matter what happens. Make sure you have the tools and supplies to keep your truck in shape including a flashlight, extra windshield washer fluid, chains, a bag of salt or sand, bungee cords, and a windshield scraper. For yourself, pack a reflective vest, blankets, a hat, a few pairs of waterproof gloves, a scarf, and thermal socks. You will also want boots with good traction and enough food and bottled water to last a full day.

Do a Circle Check

Before you hit the road, be sure to do a circle check and make sure everything is functioning properly. Ensure the wipers, lights, brakes, tail lights, washer fluid, and wiper motors are all in working order and ready for the trip. It is also important to make sure your mirrors and lights are clean and free from snow or ice while traveling. Keeping them clear will help you see what is around you and also allow you to be seen by other cars.

Keep Your Gas Tank Half Full

During severe winter conditions, getting stuck on the road is a real possibility. If you run out of gas and have to wait inside the cabin, you are putting yourself in a potentially dangerous situation. Be sure to keep your tank half-full at all times to avoid getting stranded in the snow.

Keep Your Distance from Other Vehicles

Highway traffic can often seem to travel in groups down the road. During harsh weather conditions, make sure you keep plenty of distance between you and the other vehicles. This can help everyone avoid an accident if a vehicle suddenly swerves or hits black ice. While it may be impossible to avoid other cars altogether, be especially careful to leave space between you and the truck in front of you. This will give you adequate time to break in necessary.

Use Good Judgement

Especially during the holidays, truck drivers are under huge pressure to get their shipments to their destinations. Even in the worst weather, truckers can be tempted to take the risk to make their deliveries on time. However, it is important to remember that no load is worth your life. Use good judgement and make the right call. If the snow is too dense or the highway is covered in black ice, do not take the risk. Park your truck and wait for the weather to blow over, even if it means your shipment will be late.

Practice Good Communication

Staying aware of weather forecasts and communicating with other drivers about upcoming storms or weather advisories is essential to staying safe on the road. PetroChoice’s Vice President of Human Resources Marilena Acevedo said, “Communication is key, and we keep an open line of communication with all of our drivers. When we are expecting a big storm, our leadership gets involved, and we may start a conversation a few days before to make sure we have a plan in place,” she said. “We do not want to be caught in the middle of an event without a plan. Planning is important to make it through a bad storm without too much trouble.”

Winter weather can be intimidating and certainly should not be taken lightly. However, with the right tools and preparation, you can stay safe and warm all winter long.

Fully Electric Semi-Trucks: The Future of Trucking

The trucking industry is vital for small towns and big cities all across the country. However, the environmental impact of so many big rigs on the road can deplete the earth’s resources over time. These same resources, like expensive diesel fuel, also cost fleet owners thousands of dollars every year. And with many countries setting goals to ban gas and diesel-powered vehicles in the near future, electric solutions must be made available to the long-haul trucking industry. This has created a race between trucking startups and well-known manufacturers to create the best electric semi-truck before the competition.

How Trucking Impacts the Environment

When it comes to environmentalism, semi-trucks often have a bad reputation. The stereotype of gas-guzzling trucks that produce endless dark smoke is well known. And while there may have been some truth to their reputation in the past, it is becoming less and less true.

The Environmental Defense Fund states that freight movement accounts for 16 percent of all corporate greenhouse gas emissions. This number, which also includes air and water-based transport, would have looked much different a few decades ago. Because of innovations already available, trucks are producing far less emissions than ever before. In fact, it would take 70 of today’s trucks to produce the amount of one truck from 2002.

Recent innovations have also led to trucks being more aerodynamic, which allows truckers to save thousands in gas every year. Simple tweaks to bumpers, side mirrors, tire technology, and truck skirts have led to less fuel consumption and a longer lifespan for trucks.

Even though trucks are running more efficiently than ever, there is another reason to look forward to electric trucks coming onto the market: Never worrying about fuel costs again. Diesel fuel, which was averaging at $3.50 per gallon in 2016, led to huge bills for fleet owners. A trucker traveling 120,000 miles in a year would result in a $50,000 to $60,000 spend in diesel fuel per year. That means two years of gas would cost the same as a new sleeper tractor trailer. Of course, diesel prices are less than they were in 2016, but the large investment in gas is ever-present in the trucking industry. However, with electric trucks, stopping to fill up on diesel would shift to plugging the trucks in for a quick charge, which has the potential to cut fueling costs in half.

These innovations in electric trucks are coming faster and faster to meet the needs of countries that have set goals to eliminate gas and diesel vehicles. For instance, the UK aims to ban all gas and diesels cars and trucks by 2040. That gives them only 21 years to create a power grid that can sustain the electric vehicles, as well as find solutions for the trucking and travel industries.  

Here are a few trucking companies paving the way to electric semi-trucks.

Nikola Motor Company

Nikola Motor Co., an American trucking startup founded in 2014, has been working on fully electric-hydrogen powered semi-trucks. To date, they have created prototypes for three trucks, each designed for a different purpose and to meet the needs of specific regions. So far, Nikola has produced a sleeper available in North and South America, a day truck for the Americas, and a day truck specifically for Europe, Asia, and Australia. Nikola states that their trucks will sport 1,000 horsepower engines with a 500-1,000-mile range per charge. Additionally, drivers should expect a charging session to last only 20 minutes.

Nikola currently has $13 billion in pre-order reservations for its truck. And while an official release date has not been announced, the company is planning to feature demos of their trucks at the World Nikola event in Phoenix in April 2019.

Tesla, Inc

Elon Musk’s company, Tesla, has been hard at work perfecting their electric semi-truck, the Tesla Semi, which was first revealed in November of 2017. According to Tesla, their semi, which comes with four motors, will be able to go from 0 to 60 mph in 5 seconds. They are said to have a 500-mile range on a single charge. And because most semi-truck hauls are under 250 miles, that means drivers can make an entire round trip without stopping to charge.

The Tesla Semi is scheduled to be released later in 2019, but it has already been pre-ordered by the hundreds by big-named brands. Some companies ready to embrace the new Tesla trucks include Albertsons, the parent company of Safeway, Shaw’s, Vons, Pavilion, as well as Walmart, Pepsi, FedEx, and dozens more.

The Rising Competition in Manufacturing

Nikola and Tesla are not the only two companies working to bring electric semi-trucks to highways everywhere. BMW and Daimler have both been working on their electric cars and semi-trucks. In fact, BMW is already using their electric semi for short distances at their headquarters in Germany.

Ford recently released a concept for its own electric semi-truck that they plan to call the F-Vision. Volvo has also released a concept for a completely cabless, autonomous electric semi, called Vera. As for these two concepts, no release date has been set.

The future looks bright for transportation. With so much innovation hitting the market, the trucking industry is evolving to be safer and more environmentally friendly every day.

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